Gamification is too often confused with gaming; of course, gamification makes things more fun. But it also increases engagement and motivation and stimulates users to go beyond their limits to win something.

And gamification can make a mundane task like completing a job application fun, creative, competitive and interesting. Says Jessica Miller-Merrel, a human resources veteran and founder of Blogging4jobs.com, “Injecting fun into something that is generally seen as boring or task orientated not only can increase engagement but also drive innovation and productivity, which is something your company desperately needs.”

Current productivity numbers are at historic lows with Gallup recently reporting that 70 percent of the people in the current U.S. work force have labeled themselves as disengaged or actively disengaged at work.

Engagement is especially critical when it comes to new hires since workers are the most engaged, happy and productive in their jobs the first six months. Yet video-game job applications have sometimes proved to be unsuccessful in motivating and engaging candidates, as demonstrated by failed attempts such as the Marriot’s My Marriott Hotel Facebook game.

On the other hand, several companies have been looking at how to integrate gamification into challenge-based recruiting as a powerful tool to engage candidates and assess their skills. The success of such corporate programs is related to the implementation of four key game-design strategies in the hiring process that can improve the candidate experience and empower applicants to showcase and deliver value to the company.

1. Levels: Providing clarity about the steps of the application process avoids the risk of candidates' feeling lost and disengaged.

3. Badges: Virtual goods are "unlocked" for those who succeed in the first rounds of the application process. This encourage candidates to stay focused and compete for the job.

4. Social status: Celebrating the winners shows transparency and encourages applicants to try again and have a positive candidate experience, which is critical to an employer’s branding.

Tech companies are leading the way in adopting this new technique, challenging software engineers and developers to assess their coding skills, which cannot be done by screening resumes. Google for example, implemented the Google Code Jam, a global online software writing contest with the potential to attract more than 7,500 people each year. The top 25 finalists are invited to the Mountain View, Calif., campus to compete for $50,000 in prizes as well as a chance to work at Google. Another example is the Facebook Programming Challenge in which candidates can solve programming challenges to "get noticed” by the employer.

Innovative leaders across other industries are challenging candidates on business-related problems, leveraging the four gamification strategies listed above.

Saul Minkoff, one of the co-founders of Pulse Savings, has experienced in person how challenges can appeal to the entrepreneurial spirit as an opportunity to showcase skills and creativity; in fact, his company is the product of a business-case competition.

Based on his experience, he decided to approach hiring the same way: “When looking to hire new team members, I wanted not to be biased by school names or years of experience," he said. "I needed motivated and innovative leaders that could come in with ideas, not simply wait to be fit in a box."

"The results were impressive," he added. "Candidates surprised us with proposals and ideas that my team and I [had] never thought of and that would have never come through a resume or during the interview.”

Minkoff is using 1-Page, the Silicon Valley-based company where I work that operates at the intersection between gamification and hiring, enabling businesses to engage candidates. Applicants can also access the platform without an invitation from an employer and work on unsolicited job proposals to frame their ideas and pitch the company of their dreams.

1-Page is not the only company involved with this type of activity. Another case is MindSumo: Its platform enables companies to engage students in solving real-time both business and tech challenges, rewarding the winners with monetary prizes (usually between $50 and $150).

For those entrepreneurs who are embracing challenge-based hiring, the benefits seem to go beyond engaging and identifying the best candidates; Pulse’s experience with 1-Page and the MindSumo example show how engaging candidates to solve companies’ challenges enables businesses to crowd-source ideas and innovation and access prescriptive data about applicants for enhanced strategic decision-making.